Few Beneficiaries Know Part D Out-of-Pocket Cap Now in Effect

[Duaine]

As of January 1, 2024, Part D enrollees are no longer required to pay 5% coinsurance after they reach the catastrophic threshold. According to a new KFF report, this means that in 2024, Part D enrollees will pay no more than about $3,300 for all brand-name drugs they take. And starting in 2025, out-of-pocket (OOP) drug spending will be capped at an even lower amount, $2,000, indexed annually for growth in Part D costs.

To illustrate the impact of this coinsurance change, KFF examined three commonly taken cancer drugs, each priced at well over $100,000 a year. In 2023, Medicare Part D enrollees who used any of these drugs for the entire year faced nearly $12,000 in OOP costs. In 2024, their portion will drop by eight to nine thousand dollars. And next year, when the $2,000 cap takes effect, they’ll save even more.

[EXTERNAL LINK] - Few Beneficiaries Know Part D Out-of-Pocket Cap Now in Effect - Medicare Rights Center

 

[Chazm]

And guess who will pay for it? The people who spend very little per year on their meds.

Soooo much better

 

[Duaine]

But my doctor told me that I had to use all name brand drugs...!

 

[Chazm]

I’m fairly new to Medicare compared to many on here so I haven’t seen many dramatic changes but I think this is (along with the possible elimination of overrides and such) is going to cause A LOT of chaos in 2025. Insurance companies are going to make up this money SOMEWHERE. Probably fewer $0 premium plans, $0 PCP copays and such.

But chaos is good. Probably more plan changes next year too.

I don’t understand how less money to the middle man equals worse plans. When I started in 2009, companies weren’t giving out huge overrides. Plans had $0 premium, big part B givebacks, etc, here in FL.

 

[DonP]

The elimination of massive overrides is great news for Carriers. 1/2 of the overrides was fluff and bs i figure they’ll have billions more in their pockets . I have a good fmo that does things. I do feel for the 1000’s of 1000’s of staff that will be let go .

 

[DonP]

I don’t think it works that way. If insurers didn’t receive a return on these dollars they would “save” the money now buy not spending it.

It’s like if they banned direct mail. You wouldn’t be “saving” money because you can’t do direct mail. You’d reallocate those funds into other marketing channels to continue producing.

I never said the carriers weren’t making money . But the carriers have been forced to play the game . If Aetna’s giving me $200 an app marketing money and United won’t give me any I’m going to push Aetna as there helping me .So in that regard cms is right in that big overrides can sway what company an agent places business with to an extent . Starting next yr if this goes thru all will be on a level playing field with no money going out . Much of the override money is profit in the fmo’s and agents pocket. Remember it was given out to sway business .

 

[Chazm]

You misunderstood my post. I don’t think the elimination of overrides are going to cause plans to change, only the cap on RX costs. Those are costs to the insurers. The elimination of marketing money is going to cause a restructuring of the industry. Those two together are going to make 2025 AEP chaotic

I’ve been hearing that massive changes to our commissions, plans, copays, etc., are happening for 15 years now. Just because it hasn’t happened yet, doesn’t mean it won’t. That said, nothing in 2025 is going to affect my pocket or my clients benefits.

You can quote me.

 

[Russ]

FMO's have rarely ever done anything for me. I'll get an email or a call about a new product occasionally.

Humana upline was throwing marketing money at me during AEP but I didn't fool with it.

As far as part D cap, most people don't read over what they receive in the mail from their company. Or if they do they don't understand it. Or don't want to.

 

[DonP]

You prove my point. The money was spent to drive business. It funded call centers that produced well for the carriers. So the carriers won’t be “saving” any money. They were getting enrollments from this money. They will have to replace the production that they gained from it. So, they will simply redeploy the funds to other marketing activities to replace the business they were gaining from the providing overrides and marketing money. There is no savings. Simply reallocating funds.

We can agree to disagree . Yes they will reallocate some of that money to other marketing BUT NOT NEARLY ALL OF IT . Much of that $500 per app combined override and marketing money lined the pockets of agents and fmo’s with no direct roi involved with it . When carriers spend that money it will be allocated from dollar one for roi . Wether there’s agents are not it won’t hurt the growth of the big carriers. Wethers there’s agents are not mapd will continue growing . For your information only 32% of all mapd‘s are bought thru agents . I was shocked at this # as it thought it was much more .